Factors Influencing Commercial Banks in …...The current study has investigated the factors...

© International Academic Research Journal of Economics and Finance Vol No.6, Issue No 1, March 2018, Page no. 1 - 14 ISSN Number: 2227-6254

Factors Influencing Commercial Banks in Developing

Entrepreneurship of SMEs in Bangladesh: A Case

Study on BASIC Bank Ltd.

Dr. Kamrul Hasan Associate Professor

Faculty of Business Administration American International University Bangladesh (AIUB)

Email: [email protected]

Dr. Firoja Akter Khanam Associate Professor

Department of Finance Chittagong University

Email: [email protected]

Abstract

The current study has investigated the factors influencing commercial banks in developing

entrepreneurship of SMEs in Bangladesh. The study collected opinions from 50 executives

of BASIC Bank on 5 point Likert Scale such as 5- strongly agree, 4-agree, 3-uncertain, 2-

disagree and 1-strongly disagree, in order to identify the factors that influence the BASIC

Bank in developing entrepreneurship in SME. The findings of the study revealed a number

of factors like Service Responsiveness Factor, Fund Delivery Factor, Employment of family

members and creation of new jobs Factor, Financial management skills and group identity

Factor, Independent and keeping thyself busy Factor, Fund availability Factor and the like.

INTRODUCTION

Entrepreneurship development

refers to the process of enhancing

entrepreneurial skills and knowledge

through structured training and institution

building programs. Entrepreneurship

development aims to enlarge the base of

entrepreneurs in order to hasten the pace

at which new ventures are created. This

accelerates employment generation and

economic development.

The movement of entrepreneurship

promotion and development in the past few

decades have gone a long way in SME. Both

government and various industrial promotion

and support institutions are making

considerable efforts to facilitate the process

of emergence of new entrepreneurs for

setting up enterprises in small scale sector.

These efforts involved making attractive

schemes for availability of finance and

various other assistances including technical

know-how, training, sales, purchases, etc.

RELATED LITERATURE REVIEW

The performance and growth of any

enterprise, regardless of its size are affected

by the factors prevailing in and around the

business. Nature and kinds of factors may

vary from country to country or even region

to region, period to period within the same

country depending on the pattern of

management, external support of financing,

entrepreneurship, technical manpower,

resources, technology, government policy,

structure of the economy etc. BASIC Bank

Ltd, established in 1988 and extends

finances and other support services to small

and micro enterprises with a view to develop

entrepreneurship in SME. Bank finance

intends to manufacturing, trading, service,

working capital, machine purchase which

ultimately increases income, assets,

security confidence in future of the

enterprises. The ultimate outcomes of

entrepreneurship development comprises

self-employments, employment generation,

better standard of living and the like

(Khanom, 2010).The importance of the

small and micro enterprises has been a

much addressed issue in the existing

literature that encompasses the areas such

as the impact of SMEs on the

macroeconomic indicators i.e., poverty

mailto:[email protected]

mailto:[email protected]

2 International Academic Research Journal of Economics and Finance March

(Beck, D-kuninnt and Levine,2005),

problems of financing small enterprises in

the rural areas of Bangladesh (Hossain

and Uddin, 2006), government’s role in

SME development (Welter,2001),

competitiveness of the small and medium

enterprises (Man,Lau and Chan, 2002,

Fink, 1998) and the like. These literature

has significant contribution on the supply

side issues of the small and micro

enterprises

An enormous number of factors

have been identified from the previous

literature to measure their intensity in the

promotion and development of small

entrepreneurship in Bangladesh. (The

sample bank, BASIC Bank limited

considers many factors while extending

finance to SME Many authors and

researchers have presented the

influencing factors in different ways by

identifying a set of elements that

constitutes of the environment of

entrepreneurship development in SME.

Khatun and Rahman (2012) identified the

factors affecting the small and medium

enterprises financing from the formal

sector. They identified the factors viz.,

relationship banking, quality of services,

convenient locations, processing and

consultancy fee and the like as the

contributing factors considered by financial

institutions. Afrin et.al (2008) applied the

factor analysis to identify the

entrepreneurship development related

factors. The study found out that financial

management skills and group identity of the

rural women entrepreneurship in

Bangladesh.

Naumes (1978), states that the

factors like external support for financing,

technology, management and productive

capacity are largely responsible for the

success of many new ventures. Vesper

and Album (1979), emphasized the

several factors viz.) the presence of local

market conditions, technical manpower

resources, universities with doctoral

programmes and affiliated research

laboratories of major companies and

Government, sources of venture capital

and favorable Government policies largely

govern the decision of entrepreneurs in

setting up a projects. Besides the above

listed factors, there are various factors

seriously affecting the entrepreneurship

development in a country like Bangladesh.

Some of these factors are political stability,

corruption, red tapism, bribery, smuggling,

extortion, terrorism and law order situation.

Jahur and Azad (2004), in their article

mentioned that factors affecting the growth

of SME’s are of two kinds. Internal factors

consist of entrepreneurial managers

qualifications in terms of education,

fundamental or basic and vocational

training and experience, their attitude to the

growth, management style and decision

making, skilled human resources, planning

and controlling system, financial

environment etc. and that the external

factors include buyer’s perceptions-

existing and potential extracts, policy of

financial institutions, in respect of loan

sanction and disbursement, interest and

recovery of loan, government policy and

measures in respect of taxation, tariff/VAT

and duties, liberalization of import and

export, sectoral trends complexity and

uncertainty in markets, social, political,

technical, cultural infrastructural and legal

environment. Boating and Abdulrahman

(2013), in their article examines the factors

influencing the extension of bank credit to

micro small sized enterprises based on a

sample of 572 in Ghana and Nigeria. The

results indicate that size of the firm, age of

the firm, ownership type and relationship

banking have a positive bearing on a

decision to extend credit to small firms in

West Africa. Chittithaworn, et al. (2011),

in their article investigated eight factors that

influence the SMEs business success.

These factors are: SMEs characteristics,

management and know-how, products and

2018 Kamrul Hasan, Firoja Akter Khanam 3

services, Customer and Market, the way of

doing business and co-operation,

resources and finance, Strategy, and

external environment. Riyanti (2013), in

his article examined the related factors that

affect the SME growth significantly. The

study by applying Structural Equation

Model, identified the entrepreneur

characteristics factor like age, experience,

and education and some innovative

behavior like traits, personality, adversity

significantly affect the growth of SME.

Rachmania, et.al., (2012), in their article

entitled “Influencing Factors of

Entrepreneurial Development in

Indonesia”, examined the motivational

factors of SME entrepreneurs. The study

found out 10 motive based attributes which

were, high income, personal and family life

flexibility, to control own time, family

security, independence, and the like. Khan

et. al., (2005), investigated the various

micro and macro factors that are

responsible for growth and development of

entrepreneurship in Small sale business in

Bangladesh. The study found out that the

background factors like strong education

and training facilities, desire to achieve,

accept responsibility, hard works and risk

orientation of the entrepreneurs have

bearing on the growth of small business. In

addition to this, the study also revealed the

socio- economic factors such as uniform

commercial law and limited regulations,

corruptions, encouragement and support

for society and family, good banking with

available credit, social integration, social

status, meaningful democracy and

available technology and strong

telecommunication and distribution

networks re also important for creating

entrepreneurs.

Habib, et.al., (2005), in their article,

investigated factors that affect women

entrepreneurship in India. These are

earning money or attractive source of

income, enjoying better life, availability of

loans , favorable government policy,

influence of success stories, personal

satisfaction , desire to utilize own skill and

talents , unfavorable present working

environment, self-employment and

employment of others , assurance of career

and family security, fulfillment of creative

urge of the borrows, experience in family

business, self-confidence, unable to find

suitable job, encouragement and advice of

the family member , economic necessity,

self-dependent, self-interest, inner feeling

to do something, or to make difference,

contribution to economic growth of the

locality, do something for social

development gain family and social status ,

gain technical and business knowledge

and the like.

OBJECTIVE OF THE STUDY

The main objective of the study is to

critically investigate the factors influencing

the BASIC Bank Ltd. for developing

entrepreneurship of SMEs in Bangladesh.

METHODOLOGY OF THE STUDY

Both primary and secondary data

have been used in the study. For the

purpose of the present study, the

researcher has collected opinions of 50

executives of BASIC Bank on 5 point Likert

Scale such as 5- strongly agree, 4-agree,

3-uncertain, 2-disagree and 1-strongly

disagree, in order to identify the factors that

influence the BASIC Bank in developing

entrepreneurship in SME. The data thus

collected has been tabulated first. Then the

data have been analysed by sophisticated

multivariate technique- Varimax Rotated

Factor Analysis or Principal Component

Method. The purpose of factor analysis is

mainly two folds: data reduction and

substantive interpretation. In the present

study, Principal Components Varimax

Rotated Method’ of factor analysis has

been used in order to identify the factors

influencing of BASIC bank for developing

entrepreneurship in SME.

Community

Participation


Principal Component factor

explains more variance that the loadings

obtained from any method of factoring. In

order to define the group membership, an

algorithm may be used to uncover a

structure purely on the basis of correlation

structure of the input variables. Then the

number of principal components to be

retained in the study has been decided on

the basis of Kaiser’s Criterion (1958) of

Eigen value 1. Principal Components

having higher reliability co-efficient are

more reliable in the sense that the

corresponding factors would be replicable

in other similar kind of studies. Then

communality, symbolized by h2

- are then

worked out which show how much of each

variable is accounted for by the underlying

factors taken together . Then factor scores

have been generated on the basis of

weighted average of Principal Factor

Loadings and average of respective

variables included in to the concerned

group. Ranking of each factor has been

made on the basis of scores derived.

The study has identified the

variables under taken for the study as most

important, important and least important on

the basis of mean score. In this section, the

study has figured out characteristics of

factors influencing the BASIC bank for

developing entrepreneurship in SME in the

form of mean, Standard deviation and co-

efficient of variation. The study has

grouped the factors with a mean score of 4

and above as most important factor, factors

with mean score of 3 and above as

important factors and factors with mean

score with less than 3 is least important

factor.

ANALYSIS OF FACTORS INFLUENCING

OF BASIC BANK LTD. IN

ENTREPRENEURSHIP DEVELOPMENT.

The factors under study have been

subject to analysis of iso-order correlation

matrix, identification of principal factor

techniques and rotated factor matrix.

Finally ranking of factors have been made

on the basis of factor scores derived from

regression techniques. On the basis of

extensive review of literatures and analysis

of contents of factors influencing the

entrepreneurship development in SME,

researcher has identified following factors

that affect the entrepreneurship

development in SME which are tabulated in

table-1. In this context it is to be mentioned

that so, far our knowledge, no study has

been made exclusively and extensively on

the factors influencing of BASIC Bank in

entrepreneurship development in SMEs.

It is evident forty-four variables

have been found influencing the BASIC

Bank in entrepreneurship development.

These are Increased family relationships

and cohesiveness, Development of

financial management skills, Getting adult

education, Developing awareness of health

and women’s right, Inadequacy of family

supplement income, Family support is

required, Attractive source of income,

Network and work environment, Training,

Doing something independently, Career

and family security, Quality of Service,

convenient location of the Bank, Availability

of other support services, spontaneity of

loan delivery (time amount), Customer

relationship management, Secured

transaction system, Interest Rate,

Repayment Process, Processing and

consultancy fee, Realized self and

collective identity, Creative urge, Self-

interest and self-dependent, Competent to

take and use loan, Getting educated, Ability

to accumulate family fund, Alleviation of

gender discrepancies, Scope to utilize own

skills and talents, Can employ others,

image of the bank, public relation and

media information, chapter than other

source of financing, relaxation of collateral

requirement and low service charge and

advanced technology, similarity and

correctness of information, scope for future

Community

Participation


fund availability, bank paper work

enterprise of banks, staff in solving

problems, Self-independent, Family peace,

Gaining social prestige, Can keep myself

busy, Scope for future fund availability,

Transaction acceleration and the like.

Table 1 below shows the variables vis-a-vis

weighted mean score in order of magnitude

of influence.

Data have been derived from using

SPSS version 17.

It is evident from table-2 that among

the 44 identified factors Increased family

relationships and cohesiveness,

Development of financial management

skills, Getting adult education, Developing

awareness of health and women’s right,

Inadequacy of family supplement income,

Family support is required, Attractive

source of income, Network and work

environment, Training, Doing something

independently, Career and family security,

Quality of Service, convenient location of

the Bank, Availability of other support

services, spontaneity of loan delivery (time

amount), Customer relationship

management, Secured transaction system,

Interest Rate, Repayment Process,

Processing and consultancy fees the more

significant factors in entrepreneurship

development.

It has also identified in the study

that 15 other factors, as significant on the

same basis. These are Realized self and

collective identity, Creative urge, Self-

interest and self-dependent, Competent to

take and use loan, getting educated, Ability

to accumulate family fund, Alleviation of

gender discrepancies, Scope to utilize own

skills and talents, can employ others

,image of the bank, public relation and

media information, chapter than other

source of financing, relaxation of collateral

requirement and low service charge and

advanced technology.

The study has identified nine

factors as less significant which are

similarity and correctness of information,

scope for future fund availability, bank

paper work enterprise of banks, staff in

solving problems, Self-independent,

Family peace, Gaining social prestige, Can

keep myself busy, Scope for future fund

availability, Transaction acceleration and

the like. These findings reflect the

scenarios of factors influencing the BASIC

bank for entrepreneurship development in

SME.

It has been observed from the table

that, most important group is found most

consistent with respect to lowest variability in

opinions, important group is found consistent

with respect to variability of opinions

(Average CV=27.72%), And least important

group is found least consistent with respect

to highest CV of 59.06% in opinions. These

have substantiated grouping of factors

variable on the basis of mean.

PRINCIPAL COMPONENT ANALYSIS

The correlation matrix of all 44

variables has been further subject to

principal component analysis. The Eigen

values, the percentage to total variance

and cumulative % variance have been

shown in the following table-3. This shows

that variables under study have constituted

ten groups/factors which have been

discussed in the following paragraphs.

The table- 3 shows that the Eigen

value, percentage of variance and

cumulative percentage of variance of the

factors influencing BASIC bank in

entrepreneurship development in SMEs in

Bangladesh. The first factor Financial

Management Skill and Group Identity

shows the variance explained is 13.11

percent and others are 12.28 percent,

11.23 percent, 10.11 percent, 9.23 percent,

8.29 percent, 7.28 percent, 6.23 percent,

5.98 percent and 4.28 percent respectively.

The result of the factor analysis shows that


these 10 factors collectively produce 88.02

percent variance in the data set. The total

variance explained by each of the factor

with initial Eigen values is presented in the

appendix section.

ANALYSIS OF FACTORS

Factor-1 explains 13.11 percent of

total variations existing in the variable set.

This includes variables X1, X 6, X7, X18, and

X15. This factor has significant factor

loading on these variables which formed a

major cluster. This factor belongs to

increased family relationships and

cohesiveness, development of financial

management skills, realized self and

collective identity, getting adult education,

developing awareness of health and

women’s right. So it provides a basis for

conceptualization of a dimension which

may be identified as financial management

skill and group identity factor.


the total variations existing in the variables

set. This includes variables X17, X19, X4, X5,

X8, X21 and X25. This factor has significant

factor loading on these variables which

have formed a major cluster. This factor

belongs to creative urge, self-interest and

self-dependent, inadequacy of family

supplement income, family support is

required, attractive source of fund,

competent to take and use loan, getting

educated and the like. So it provides a

basis for conceptualization of a dimension

which may be creative urge.


total variation existing in the variable set.

This includes self dependent (X 36 ), family

peace (X 34 ), gaining social prestige(X 9 ),

ability to accumulate family fund (X 10 ),

alleviation of gender discrepancies(X11

)

and the like. This factor has provided a


which may be identified as family fund and

women involvement factor.


the total variation existing in the variable

set. This includes network and work

environment(X22

), training (X20

), scope to

utilize own skills and talents(X24

), can

employ others (X23

)and the like. So this

factor has provided a basis for

conceptualization of a dimension, which

may be identified as employment of family

members and creation of new jobs factor.


the total variations existing in the variable

set. This includes X28, X29 and X30. This

factor has also significant factor loading

ranging from moderate to high on these

variables which formed a significant

important cluster. This factor is concerned

with doing something independently, can

keep myself busy, career and family

security and the like. So this factor has

provided a basis for conceptualization of a

dimension which may be identified as

independent and keeping thyself busy.



set. This includes variables X35, X30, X31,

X37 , X32 and X38. This factor has significant

factor loading on these variables which

have formed a major cluster. This factor

belongs to quality of service of bank,

availability of other support service from the

bank, image of the bank, similarity and

correctness of information, expertise of

banks in solving problems, convenient

location of the bank and the like. So, it

provides a basis for conceptualization of a

dimension which may be identified as

service delivery factor.



set. This includes X39, X42, X41, X40, X33 and

X43. This factor has also significant factor

loading ranging from moderate to high on


these variables which formed second

important cluster. This factor is concerned

with spontaneity of loan delivery (time,

amount), customer relationship

management, processing and consultancy

fee, secured transaction systems, public

relation and media information and

transaction acceleration. So this factor has

provided a basis for conceptualizations of a

dimension, which may be identified as

service responsiveness factor (SRF).



set. This includes X2 and X12. This factor

has significant factor loading ranging from

moderate to high on these variables which

formed third important cluster. This factor is

concerned with cheaper than other source

of financing and scope for future fund

availability and also provides a basis for

conceptualization of dimension which may

be identified as fund availability factor

(FAF)



set. This includes X13, X14, X16 and X44. This

factor has significant factor loading ranging

from moderate to high on these variables

which formed third important cluster. This

factor is concerned with interest rate,

repayment process, relaxation of collateral

requirement, Advanced technology and

also provides a basis for conceptualization

of a dimension, which may be identified as

fund delivery factor.

Factor-10, explains 4.28 percent of


set. This includes X27 and X26. This factor

includes bank paperwork or bureaucracy

and low service charge and also provides a


which may be identified as implicit cost

factor.

RANKING OF FACTOR

Finally, the ranking obtained on the

basis of factor wise average score are

shown in the following table:

Weighted Score = (Factor loading ×

Weighted mean) ÷ No. of Variables in

each factor.

The service Responsiveness factor

includes spontaneity of loan delivery (time

and amount) customer relationship



relation and media information, and

transaction acceleration. The fund delivery

factor includes interest rate, repayment

process, relaxation of the collateral

requirement, advanced technology that

have been identified as the most important

variable. The employment of family

members and creation of new jobs factor

includes employment network and work

environment, training, scope to utilize own

skills and talents can employ others and

the like. The financial management skill

and group identity factor includes






women’s right. The independent and

keeping thyself busy factor includes






women’s right. The fund availability factor

includes cheaper than other source of

financing, scope for future fund availability.

The creative urge factor includes creative

urge, self-interest and self-dependent,

inadequacy of family supplement income,

family support is required, attractive source

of fund, competent to take and use loan,

getting educated. The service Delivery


factor includes quality of service of bank,

convenient locations of the bank, image of

the bank, availability of other support

services, similarity and correctness of

information, expertise of banks staff in

solving problems.The implicit cost factor

includes bank paper work or Bureaucracy

and low service charge. The family fund

and women development factor includes

self-dependent, family peace, gaining

social prestige, ability to accumulate family

fund and alleviation of gender

discrepancies.

SUMMARY OF THE FINDINGS

The study is of empirical and

theoretical ones. The identification of the

influencing factors of BASIC Bank for

developing entrepreneurship in SME is

based on the opinion survey of the selected

respondents.

The study has identified the factors

under ten broad categories and the

followings are the top six important factors

that influence entrepreneurship

development in SME.

Service Responsiveness Factor.

Fund Delivery Factor Employment of

family members and creation of new

jobs Factor Financial management

skills and group identity Factor

Independent and keeping thyself busy

Factor Fund availability Factor.

Of the service Responsiveness factor,

spontaneity of loan delivery (time and

amount) customer relationship



relation and media information, and

transaction acceleration have been

observed the most significant ones. Of the

fund delivery factor, interest rate,

repayment process relaxation of the

collateral requirement, advanced

technology has been identified as the most

important variable. Of the employment of

family members and creation of new jobs

employment network and work

environment, training, scope to utilize own

skills and talents, can employ others have

been identified as the most important ones.

Of the financial management skill and

group identity, increased family


development of financial management

skills, realized self and collective identity,

getting adult education, developing

awareness of health and women’s right

have been observed as the most important

ones. Of the independent and keeping

thyself busy factor, increased family


development of financial management

skills, realized self and collective identity,

getting adult education, developing

awareness of health and women’s right

have been observed as most significant

ones. Of the fund availability factor,

cheaper than other source of financing and

scope for future fund availability have been

observed as the most important variable.

The experience from the parent’s family of

the borrowers and the option limit may also

lead to the rural women borrowers to be

entrepreneurial.

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Entrepreneurship Development in

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A Multivariate Analysis”, Journal of

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Small – Scale Business”, Business

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Development in Bangladesh”,

Massey University, Palmerston

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Formal Channel” available

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Table: 1

The variables influencing the BASIC Bank Ltd for entrepreneurship development based on Mean-

Weighted scores

Variable Mean weighted scores

Most Important Factors

X1 4.10

X3 4.43

X7 4.20

X18 4.23

X19 4.29

X4 4.10

X5 4.32

X11 4.19

X22 4.28

X23 4.29

X29 4.18

X35 4.00

X38 4.10

X30 4.033

X39 4.267

X42 4.266

X40 4.166

X13 4.367

X14 4.133

X14 4.26

Important Factors

X6 3.13

X15 3.13

X17 3.23

X8 3.19

X21 3.23

X9 3.93

X10 3.45

X20 3.93

X24 3.13

X31 3.40

X33 3.667

X2 3.40

X16 3.903

X26 3.967

X44 3.67

Least Important Factors

X37 2.933

X25 2.18

X36 2.39

X34 2.32

X28 2.19

X12 2.966

X27 2.93

X32 2.866

X43 2.135

Notes:1. Data have been compiled by the researcher.


Table: 3

Factors influencing of BASIC Bank for Entrepreneurship development in SME

Factor Name of Factor

Rotation sum of Squared Loading

Eigen

values

% of

variance

Cumulative

% Variance

1. Financial Management Skill and Group

Identity (FMSGI)

5.13 13.11 13.11

2. Creative Urge and Self Interest (CUSI) 4.32 12.28 25.39

3. Family Fund and Women Involvement

(FFWI)

3.13 11.23 36.62

4. Employment of Family Members and

Creation of New Job (EFMCNJ)

2.54 10.11 46.73

5. Independence and Keeping Thyself Busy

(IKTB)

2.43 9.23 55.96

6. Service Delivery factor (SDP) 2.424 8.29 64.25

7. Service Responsiveness factor (SRF) 1.917 7.28 71.53

8. Fund Availability Factor (FAF) 1.723 6.23 77.76

9. Fund Delivery Factor (FDF) 1.495 5.98 83.74

10. Implicit Cost Factor (ICF) 1.4366 4.28 88.02

Extraction Method: Principal Component Analysis.

Note: Data have been compiled by the researcher.

Table-4: Factor-1: Financial management skill and group identity

Name of the variables Factor Loading

X1 Increased family relationships and cohesiveness .762

X6 Development of financial management skill .678

X7 Realized self and collective identity .531

X18 Getting adult education .511

X15 Developing awareness of health and women’s right .501

Variance accounted for 13.11


Table-5: Factor-2: Creative Urge and self interest


X17 Creative urge .893

X19 Self-interest and self-dependent .810

X4 Inadequacy of family supplement income .792

X5 Family support is required .692

X8 Attractive source of income .532

X21 Competent to take and use loan .511

X25 Getting educated .508

Variance Accounted for 12.28



Table-6: Factor-3: Family fund and women involvement


X36 Self-Dependent .789

X34 Family peace .721

X9 Gaining social prestige .683

X10 Ability to accumulate family fund .672

X11 Alleviation of gender discrepancies .531

Variance accounted for 11.23


Table -7: Factor-4: Employment of family members and creation of new job


X22 Network and work environment .811

X20 Training .732

X24 Scope to utilize own skills and talents .613

X23 Can employ others .533



Table-8: Factor-5: Independent and keeping thyself busy


X28 Doing something independently .863

X29 Can keep myself busy .713

X30 Career and family security .629



Table-9: Factor-6: Service Delivery Factor (SDF)


X35 Quality of service of bank .800

X30 Availability of other support service from the bank .716

X31 Image of the bank .670

X37 Similarity and correctness of information .668

X32 Expertise of bank’s staff in solving problems .521

X38 Convenient location of the bank .510




Table-10: Factor-7: Service Responsiveness Factor

Name of the variables

X39 Spontaneity of loan delivery (time and amount) .801

X42 Customer relationship management .767

X41 Processing and consultancy fee .682

X40 Secured transaction systems .648

X33 Public Relation and Media information .539

X43 Transaction acceleration .513



Table-11: Factor-8 Fund Availability factor

Name of the Variable Factor loading

X2 Cheaper than other source of financing .801

X12 Scope for future fund availability .785



Table-12: Factor-9: Fund Delivery Factor


X13 Interest rate .667

X14 Repayment Process .587

X16 Relaxation of Collateral Requirement .513

X44 Advanced technology .483


Note:Data have been compiled by the researcher.

Table-13: Factor -10: Implicit cost factor


X27 Bank paperwork or Bureaucracy .857

X26 Low service charge .474




Table-14: Factor Ranking

S.N Factor Weighted Score Ranking

1 Service Responsiveness Factor 2.67 I

2 Fund Delivery Factor 2.66 II

3 Employment of family members and creation

of new jobs 2.65 III

4 Financial Management Skill and Group

Identity 2.64 IV

5 Independent and keeping thyself busy 2.63 V

6 Fund Availability Factor 2.52 VI

7 Creative urge 2.51 VII

8 Service Delivery Factor 2.37 VIII

9 Implicit Cost Factor 2.18 IX

10 Family Fund and Women Involvement 1.90 X

Note: i) Data have been compiled by researcher.

Factors Influencing Commercial Banks in …...The current study has investigated the factors...

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